The Dollar Index is turning lower this morning after a strong run higher over the past two trading days. The price currently rests on the $96.15 support level which I expect to be broken, and with trendline support capping any further upside, I see it likely that we will see the greenback sell off once more towards $95.90 today. This bearish view holds as long as the price remains below the trendline (currently $96.30).

The USD/JPY pair has been strengthening since the initial NFP losses on Friday and reached a zone of resistance which in the past has provided a strong selloff. Unfortunately with this pair, there is no particular clear selloff level and as such we have to take out lead from price action.

This morning has seen the price not only break below the ¥120.40 support level that it has respected overnight, but also formed a bearish engulfing pattern. The ¥120.15 mark is the key support level I need to see taken out, and for now it seems like the price is bouncing on it rather than moving through. However, further downside seems likely, and should the price break below ¥120.15, I would see this as a signal that it will begin to trend back towards the ¥119.50 area.

AUD/NZD has been suffering significant losses over the past two weeks. However, with the price returning to the NZD$1.0886-10889 support area (May resistance-July support) we are faced with either a breakdown through support or a possible bullish reversal.

The strength of the upside so far this morning shows the bullish scenario is looking more likely, and with the creation of new highs and higher lows, there does seem to be a good likeliness of a strong move higher from here. For the short term, a retracement could be likely, yet I expect that would be capped around NZD$1.093 if we reach it, and ultimately I am bullish unless it moves back below NZD$1.0888.

Given the size of the move lower and the largely rangebound nature of this market, I do expect significant gains if this moves higher, with NZD$1.11 and NZD$1.12 realistic medium-term resistance levels to watch out for.

The NZD/USD pair has been consolidating yesterday and overnight, within a very clear uptrend that has lasted over a week. However, the question now is whether this consolidation is just that or the beginning of a bearish reversal/retracement. I see the creation of new short-term higher lows and flat lining highs as a bullish signal, especially given the hammer formed in the last hourly candle. Theoretically this should lead to the creation of a new high above $.6516 soon, and on to break through $0.6532. Given that I am bullish on both NZD/USD and AUD/NZD, I am by default bullish AUD/USD too.